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UPDATED: Nomura analyst Michael Nathanson lowers his price target by $1 and his ad growth forecast, but leaves his profit projection unchanged following a downgrade from another Wall Street observer.

NEW YORK - Amid slower advertising growth in the latest quarter and continuing ratings challenges at Nickelodeon, which the company has been probing with ratings firm Nielsen, Wall Street analysts have started weighing in on the outlook for Viacom's stock.

Nomura Securities analyst Michael Nathanson on Wednesday lowered his price target on the stock, which he rates at a "buy," minimally - by $1 to $54. That would still provide upside of 26.7 percent, he highlighted though. "Viacom remains a value play with a shrinking equity base from [stock] buybacks," he said.

In a report entitled "Didn't We Almost Have It All," Nathanson said ratings weakness should be offset by cost saving opportunities and higher film unit estimates, leaving his quarterly and full fiscal year profit forecasts unchanged. But he lowered his advertising revenue forecasts.

"Given the reduction in domestic ad growth forecasts in the fourth quarter due to weak ratings, the company’s reluctance to provide forward fiscal first-quarter ad trending commentary and seemingly inexplicable declines in Nickelodeon, fiscal year 2012 has started off on the wrong foot," the Nomura analyst said. "Unfortunately for Viacom, the decline at Nick continues to accelerate and Nick’s advertising sales (due to heavy promotion of toys, movies and other gifts) is most heavily skewed to the holiday calendar fourth quarter".
He lowered his U.S. ad growth forecast to 3 percent in the current quarter and 3.4 percent for the full fiscal year that started in October.

Late Monday, Miller Tabak analyst David Joyce had downgraded his rating on Viacom shares from "buy" to "neutral," citing the ratings issues at Nickelodeon, "which should be a headwind for ad revenue growth."

While Joyce said that this could be "possibly just a short-term phenomenon," he also wrote: "Advertisers are going to want to pay for the lower [Nickelodeon] Nielsen ratings, which could be resulting in make-goods (Viacom has to provide free ad inventory time to make up for the supposed gross ratings point misses), that could pressure ad revenue for the current quarter."

Wunderlich Securities analyst Matthew Harrigan, meanwhile, came out in support of Viacom, on which he has a "buy" rating and $60 price target.

"Viacom's stock has recently reacted negatively to analyst downgrades off Nickelodeon ratings - which should have long been in estimates," he wrote in a note to investors on Thursday. "We already had Nickelodeon ads off mid- to high-single digits for fiscal year 2012."

Plus, "the Melrose Investor 2 LP lawsuit over Paramount's profits is merely a tempest in a teapot with relatively modest tens of millions at stake, although it is an interesting window on film accounting," Harrigan argued.

Finally, he also noted two other positives for Viacom. Stock repurchases should "continue unabated," while restructuring savings support more content investment, Harrigan highlighted.